### Renewable Energy Courses

Renewable energy finance isn’t just an extension of our project finance practice, its one of the areas we’re most excited about. We’ve consulted and trained developers, entrepreneurs, banks, governments, and policy-makers on projects spanning numerous continents.

Our team is deeply familiar with breaking down even the most complex financing structures (such as US tax equity partnerships). We can create custom solutions for region-specific requirements anywhere in the world.

We’ve taught courses on almost every topic in financial modeling, project finance, energy finance and advanced topics in corporate finance. In the following sections, you’ll see outlines and samples of courses we’ve taught before.

Every course listing you see here has been taught, and we can easily adapt courses to fit region-specific needs. Let us know what sort of training you need, and our team will put it together.

**Course Information**

**Course Name:** Renewable Energy Masterclass

**Overview:** This class is our largest, most comprehensive course offering for renewable energy. We’ll walk you step-by-step through every aspect of analyzing, structuring, and financing every major renewable energy project. You’ll work through resource assessment for technologies from Hydro to Solar, you’ll analyze risks belonging to each respective technology, and you’ll learn to structure the project’s financial profile under every credit constraint known.

**Course Length: **7 days

**Agenda**

*DAY 1*

* *

**PART 1: DEFINITION OF TERMS, RENEWABLE COSTS, LEVELIZED COST OF ELECTRICITY**

*Overview of Terms in Project Finance Terms in the Context of Renewable Energy through Review of Financial Models*

- Renewable Energy Terms
- Economic Issues Associated with Renewable Energy
- Alternative Contract Structures Relative to Conventional Plants
- Grid Parity
- Carrying Charge Factor
- Feed-in Tariff Policy
- Renewable Energy Pricing versus Multi-part Tariffs in Conventional Energy

*Drivers of Value in Renewable Energy Projects*

- Resource Assessment and Capacity Factor
- Development Cost and Timing
- Electricity Pricing
- Capital Costs
- Operating and Maintenance Costs
- Capital Recovery Factor, Taxes, Financing
- Operating Costs, Maintenance Costs and Availability

*Capital Intensity and Levelized Cost of Alternative Technologies*

- Definition of Capital Intensity and Cost of Capital
- Four Factors that Drive LOCE
- Capital Cost of Project
- Capacity Factor of Project
- Operation and Maintenance Expenses
- The Carrying Charge Rate

*Exercise on Computing Grid Parity*

- Databases for Electricity Costs
- General Discussion of Cost Trends in Wind, Solar, Natural Gas and Other Technologies
- Review of IEA Cost Analysis for Various Types of Renewable and Non-Renewable Plants Including On-Shore and Off-Shore Wind, Solar PV, Solar Thermal, Geothermal, Wave Energy, Hydro and Biomass
- Natural Gas Prices by Region and Over Time
- Grid Parity with Different Capital Cost, Carrying Charge Rates and Natural Gas Prices

*DAY 2*

**PART 2: OVERVIEW OF PROJECT FINANCE, COST OF CAPITAL AND PRICING CONTRACTS FOR RENEWABLE ENERGY**

*Economic and Financial Theory of Project Finance*

- General Discussion of Risks for Renewable Projects
- Capacity Factor Risk (Solar, On-Shore Wind, Off-Shore Wind, Hydro)
- Construction Risk (Off-Shore Wind and Hydro versus Solar)
- Operation and Maintenance Risk
- Contract Risk
- Measurement of Risk using Traditional Finance Theory and WACC
- Review of Solar Manufacturers
- Theory of Cost of Capital, Beta and Equity Risk Premium Applied to Renewable Energy
- Contrast of Solar and Off-shore Wind from Traditional Cost of Capital and Free Cash Flow Perspective
- Measurement of Value and Risk using Project Finance
- Debt Capacity and Credit Analysis of Different Transactions
- Use of Equity IRR versus Project IRR
- Relying on External Cash Infusions Rather than Internal Analysis
- Financing for Different Types of Projects
- Debt Capacity and Project Finance Terms
- Effects of Debt Service Coverage Constraint versus Debt to Capital Constraint
- Debt Service Coverage Ratio Definition and Targets
- Debt Tenor, Alternative Repayment Structure, Average Life
- Credit Spreads and Target Credit Ratings in Project Finance
- Debt Service Reserve and Maintenance Reserve
- Covenants, Cash Flow Sweeps and Subordinated Debt

*Project Finance Valuation for Renewable Energy*

- Project IRR to Screen Projects
- Equity IRR to Structure Projects and Minimum Required Equity IRR for Different Renewable Projects
- Equity IRR Complexities from Re-Financing and Development Fees

**PART 3: REVIEW OF COSTS, CAPACITY FACTORS, AND PRICING STRUCTURES FOR ALTERNATIVE RENEWABLE TECHNOLOGIES AND BUILD-UP OF PROJECT FINANCE MODEL**

*Discussion of Wind and Solar Technologies*

- On-Shore Wind
- Historic and Current Trends in Capital Cost
- Review of Financial Data for Suppliers
- Fixed and Variable O&M Cost
- Capacity Factors and General Discussion of One-year versus Long-term P90, P75 etc.
- General Contract Terms
- Feed in Tariffs and PPA Agreements for On-Shore Wind
- Off-Shore Wind
- Capital Cost Data Base, Distance, Depth and Height
- Balance of System Costs for Off-Shore versus On-Shore
- Operating Costs and Availability Issues
- Capacity Factors
- Feed-in Tariffs
- Case Study of Princess Amelia Financing
- Solar PV
- General Discussion of Technology
- Demand and Supply and Changes in German Feed-in Tariffs
- Review of Solar Companies and Financial Issues
- Financial Performance of Manufacturers
- Balance of System Costs and Inverter Costs
- Performance Guarantees and Other Contract Terms
- First Solar Case Study
- Solar Thermal
- Costs and Capacity Factor
- Operating Cost
- Potential Trends

*DAY 3*

**PART 4: RESOURCE ASSESSMENT**

*Overview of Resource Assessment in Renewable Projects*

- Resource Assessment of Wind – working with hourly wind speeds, Weibull Distributions and Statistical Analysis (P90, P50 etc.)
- Resource Assessment of Solar – Direct and Diffuse Radiation, Sunlight Angles and RetScreen.)
- Resource Assessment of Geothermal and Hydro
- Probability Distributions of Resources
- Case Study on Resource Analysis in Loans

*Modelling Resource Distributions of Solar Power*

- Data sources for Solar Irradiation
- Computation of Production from Efficiency with Adjustments for Performance
- Statistical and Seasonal Distribution of Production Data in Different Locations
- Use of RetScreen for Simple Analysis
- Computation of P95, P90, P75 and P50 Statistics

*Case Study on Interpretation of P75, P90, P95 and P99*

- Review of Credit Analysis for Wind Projects
- Analysis of Resource Risk in Different Reports
- P90/P50 for One Year and for Ten Years
- Case Study on Detailed Calculation of Resource Distribution

*Modelling Resources for Hydro Power*

- Fundamental Hydro Power Equation
- Sizing of Hydro Plants and Exceedance Curves
- Variance in Rainfall and River Flow
- Computation of P95, P90, P75 and P50 Statistics for Hydro Capacity Factor

*Modelling Resource Distributions of Wind*

- Overview of Wind Data
- Weibull Distribution and Wind Data
- Power Curve for Wind Turbines
- Distribution of Wind Resources and Wind Studies
- Simulation of Power Distribution
- Computation of P95, P90, P75 and P50 Statistics

*Interpretation of Resource Assessment for Risk Analysis*

- Mean Reversion of Resources
- Aspects of Probability Distribution other than Resources
- Use of Probabilities in Financial Analysis
- Contrast Among Different Risks

*DAY 4*

**PART 5: VALUATION AND PROJECT FINANCE MODELLING FOR RENEWABLE PROJECTS**

*Financial Statement Analysis in Renewable Project Finance*

- Risks and Stages of Project
- Source and Use of Funds Statement before Commercial Operation
- Focus on Cash Flow and EBITDA
- Interpretation of Cash Flow Statement
- Reserve Accounts for Debt Service and Other Factors
- Computation of Equity Cash Flow and Free Cash Flow and IRR versus Return on Investment

*General Discussion of Project Finance Models*

- General Objectives of Financial Models and Financial Forecasts
- Objectives of Project Finance Models
- Flexibility, Structure, Accuracy and Transparency of Project Finance Models
- Examples of the Structure of Actual Project Finance Models
- Creation of Project Finance Model Structure

*Mechanical Issues in Creating and Interpreting Project Finance Models*

- Phases in Project Financing for Renewable Projects
- Sources and Uses Analysis in Models
- Importance of Debt Sizing, Debt Funding and Debt Repayment
- Fixed Asset Analysis
- Profit and Loss Statement and Tax Analysis
- Cash Flow Waterfall
- Resolving Circular References without Copy and Paste Macros arising from Funding and Sculpting

*Model Complexities for Renewable Finance Projects*

- Mechanics and Rational for Alternative Incentive Schemes
- Benefits of Investment Schemes Relative to Feed-In Tariffs
- Effects of Incentives on the Overall Cost and Require Feed-in Tariffs of Different Renewable Projects
- Cash Flips and Allocations of Cash Flow to Different Equity Investors – Interpretation of Risk and Return with Different Cash Flow Allocations
- Computation of Project Value Assuming Different Sale Dates and Risk Adjusted Discount Rates from Buyer Perspective as Risk of Project Changes from Signing Contracts, Working Through Mechanical Issues and Demonstrating Cash Flows from Historic Record.
- Incorporate Refinancing Assumptions in Financial Models through Adding Sources and Uses of Funds Analysis in Alternative Re-financing Periods and Evaluating Different Possible Features of Re-financing.

*DAY 5*

**PART 6: RISK ANALYSIS OF RENEWABLE ENERGY**

*General Discussion of Risk in Renewable Energy Projects*

- Discussion of Differences in the Nature of Risks for:
- On-Shore Wind (Wind Resource)
- Off-Shore Wind (Maintenance and Life Expectation)
- Solar (Small Risks become Big with High Leverage)
- Hydro (Capacity Factor and Merchant Price Risk)
- Wave (Refurbishment Timing)
- Geothermal (Development Probability)

- Risk Matrix, Risk Classification and Risk Mitigation
- Risk Evaluation Using Break-Even and Sensitivity Analysis
- Risk Evaluation Using Scenario Analysis with Focus on the Manner in which Bankers Apply Downside Analysis
- Measurement of Risk Using Structured Master Scenario Page in Excel Model with Options for Adding Sensitivity Analysis to Defined Scenarios
- Risk Analysis Using Spider and Tornado Diagrams

*Credit Analysis in Renewable Project Finance*

- Background on Probability of Default and Loss Given Default
- Definition and Calculation of DSCR
- Use of DSCR in Base (P50 Cases) and Downside (P90, P95 Cases) in Determining Debt Capacity
- Application of LLCR and PLCR

*Contract Structuring in Renewable Project Finance*

- Importance of EPC Contract in Different Projects (Off-Shore Wind and Hydro)
- Performance Contracts in Solar Projects
- Power Curve and Availability Guarantees in Solar and Wind Projects
- O&M Contracts and Warranties
- Insurance
- Counterparty Risk in Different Projects

**PART 7: RE-FINANCING, ELECTRICITY PRICING, BIOMASS AND GEOTHERMAL ISSUES**

*Re-Financing for Renewable Projects*

- Types of projects where re-financing is important – off-shore wind, wave energy, merchant hydro projects and geothermal
- Effects of re-financing on equity IRR and difficulty of defining the equity IRR with short-debt duration
- Structuring project finance models and analysis to measure the effect of re-financing on equity returns

*Electricity Pricing Analysis in the Context of Renewable Energy*

- Overview of Electricity Prices and Electricity Pricing Designs Around the World
- Relevance of Electricity Pricing to Renewable Analysis
- Short-term and Long-term Marginal Cost for Pricing Analysis

*Pricing Analysis for Biomass Projects*

- Evaluation of Project Finance Model for Biomass
- Capital Cost, Heat Rates and Operating Costs of Biomass Projects
- Examples of Biomass Projects
- Tipping Fees and Construction of Price Curves from Local Supply and Demand Data

*Development Costs in Renewable Projects*

- Development Time Frame and Costs in Wind and Solar Projects
- Exploration Costs and Time Frame in Geothermal Projects
- Fees and Compensation for Development and Treatment of Development Fees when Computing Equity IRR
- Probabilities of Proceeding Beyond Development
- Value and Costs of Development and Research Stage
- Value of Development Expenditures versus Construction Expenditure
- Payment of Development Fees
- Development Costs and Real Option
- Valuation of Development as Real Option
- Compensation for Development Costs

*Modelling Exploration and Development Options – Geothermal Case*

- General Cost and Resource Parameters for Geothermal Projects
- Review of Project Finance Model for Geothermal Project
- Exploration and Development Cost, Probability Time Frame
- Segregating Development Phases
- Discount Rates for Different Stages
- Computation of Expected Value

*Interpretation of Development Value*

- Relative Effect of Development Cash Costs and Construction Costs
- Break-even Development Probability
- Length of Development Period

**Resources Received by Participants**

- Financial Model Library
- Electricity/Commodity Pricing Software (C++)
- Databases on Actual Projects, Commodity Price History and Case Studies
- Manuscript of Trivium Lead Trainer Ed Bodmer’s upcoming book,
*The Valuation Mirage*– addressing many modeling and valuation issues covered in the course

**Course Information**

**Overview:** The Risk Analysis Modelling in Excel training course will provide participants with the ability to add alternative types of risk analysis to different types of financial models in a flexible and efficient manner. Risk analysis techniques will cover traditional methods ranging from scenario analysis, sensitivity analysis and break even analysis to mathematical analysis with Monte Carlo simulation. Key objectives of the course include understanding the process to add scenario analysis to any financial model and to evaluate the benefits and problems of applying time series equations and simulation analysis with alternative parameters.

**Course Length: **1 day

**What You’ll Learn**

- Create a structured scenario and sensitivity analysis from existing models that effectively displays the effect of variables and compute break-even analysis in alternative scenarios.
- Evaluate alternative break-even points for structured finance transactions with multiple debt and equity tranches as well as different credit enhancement structures such as cash flow sweeps, traps and reserve accounts.
- Compute P75, P90 statistics for alternative variables and understand how to interpret effects of mean reversion, limits and alternative approaches to measuring variance.
- Discover how easy you can create a Monte Carlo simulation analysis without any add-in programs using a few lines of VBA code and how to create functions that can perform Monte Carlo simulation with a user-defined function.
- Compute volatility mean reversion and price boundary statistics for different time series and understand the difficulty in computing volatility in the presence of a series with high mean reversion.
- Use historic data for securities prices, commodity prices and demand to evaluate alternative whether the distributions follow a normal distribution or are better represented by alternative distributions.
- Simulate the possible movement of correlated variables and create test statistics to evaluate whether the input correlation is the same as the generated correlation.
- Add Monte Carlo simulation to corporate models, project finance models and acquisition models with different price boundaries, mean reversion parameters, correlations and volatility statistics.
- Learn Excel techniques included selected user defined functions with VBA to make better presentations from models and to make models more transparent and efficient.

** **

**Agenda**

**Part I – Adding Risk Analysis to Financial Models **

- Review of alternative traditional and mathematical risk analysis techniques applied to corporate models, project finance models and structured acquisition models.
- Incorporation of master scenario analysis and sensitivity diagram from corporate model to evaluate credit ratios and to demonstrate variability in enterprise value and use of the return on invested capital to evaluate the reasonableness of the EBITDA assumptions.
- Inclusion of break-even analysis in structured finance transactions with multiple debt and equity tranches to measure the effects of different capitalization and different credit enhancements (such as cash flow sweeps) on the risk of a transaction.
- Measurement of Risk Using Structured Master Scenario Page in Excel Model with Options for Adding Sensitivity Analysis to Defined Scenarios
- Computation of value assuming different sale dates and risk adjusted discount rates from buyer perspective as risk of project changes from signing contracts, working through mechanical issues and demonstrating cash flows from historic record.

** **

**Part II – Evaluation of Time Series Data and Computation of Statistical Parameters **

- Review of time series theory to define the possible movement in prices, quantity sold, costs and other variables.
- Program spreadsheets to automatically upload data from alternative websites on an automated basis using simple VBA code.
- Compute volatility statistics for alternative time periods and evaluate whether different distributions such as stock prices, interest rates and commodity prices follow a normal distribution.
- Derive implied mean reversion from computing volatility with random walk compared to actual volatility and fit alternative distributions to data.
- Compute implied volatility from option pricing models and use the Merton Model to evaluate credit spreads on different types of debt instruments.

**Part III – Use of Monte Carlo Simulation and Options Pricing Models in Measuring Risk in Different types of Financial Models **

- Illustration of Monte Carlo simulation using four different excel methods to evaluate the credit spread on senior and subordinated debt with different levels of volatility.
- Reconciliation of Monte Carlo simulation models with option pricing models through constructing option pricing models with VBA functions.
- Incorporation of boundary conditions, mean reversion and correlation among in Monte Carlo simulation analysis and analysis of whether input parameters for mean reversion and correlation are consistent with constructed distributions.
- Construction of Monte Carlo simulation using non-normal distributions through creating distributions with fat tails, skewed probabilities and extreme jumps.
- Addition of Monte Carlo simulation to existing corporate models and project finance models and effective presentation of outputs to measure credit risk and equity value at risk.
- Case study of measuring the risk benefits of cash sweeps and other credit enhancements in a wind transaction through converting P90 and 75 statistics to volatility parameters and applying Monte Carlo simulation.

**Course Information**

**Overview: **This course is designed for renewable energy finance beginners and professionals alike. With a focus on Solar PV and thermal, we will break down every aspect of a solar project financing while keeping a broader view of how the technology compares to the rest of the renewable energy sources at large. We won’t just teach you about the financing, we’ll teach you how to think about and quantitatively analyze the value drivers of solar projects.

**Course Length: **2**–**3 Days

**Key Objectives:**

- Understand the differences in financing structures for solar PV and solar thermal project relative to other sources of renewable energy (biomass, wind, geothermal, etc.)
- Learn to develop and analyze solar project finance models
- Measure and evaluate changes in project risk over the different stages of development, and how these changes impact equity returns and asset valuation for potential sale

**Solar Specific Operations Topics:**

- Resource availability risk and economics
- Measuring annual and seasonal production from financial analysis perspective
- Degradation
- Alternative financing structures
- Feed-in-Tariffs
- Purchase Power Agreements (PPAs)

- Learn to evaluate trends in renewable energy cost of capital, operating costs, and resource efficiency

**Project Finance Modeling Features:**

- Understanding the implications, effects, and applications of various project finance tools, topics and conventions
- Debt modeling topics: debt sculpting, debt sizing, DSCR, DSRA, tenor sizing, re-financing
- Create flexible scenario and sensitivity analysis to evaluate resource risk
- Resolve all circularity issues while maintain model flexibility with Trivium Circularity Management
- Measure the effect of probabilistic risk assessment on the debt capacity of alternative renewable projects.

**Agenda**

*Day 1: The Grammar*

*Key Topic: Definition of Terms, Renewable Costs, Levelized Cost of Energy*

*Overview of Terminology in Renewable Energy Project Finance through Review of Financial Models*

- Renewable Energy Terms
- Project Finance Terms and Sponsor Objectives
- Economic Issues Associated with Renewable Energy
- General Contract Structure versus Conventional Energy
- Grid Parity
- Carrying Charges
- Feed-in Tariff Policy

*Drivers of Value in Renewable Energy Projects through Review of Financial Model*

- Resource Assessment
- Development Cost and Timing
- Electricity Pricing
- Capital Costs
- Taxes and Financing
- Operating Costs, Maintenance Costs and Availability

*Exercise on Computing Grid Parity and Levelized Cost of Electricity *

- Databases for Electricity Costs
- General Discussion of Cost Trends in Wind, Solar, Natural Gas and Other Technologies
- Review of IEA Cost Analysis for Various Types of Renewable and Non-Renewable Plants Including On-Shore and Off-Shore Wind, Solar PV, Solar Thermal, Geo-thermal, Wave Energy, Hydro and Biomass
- Natural Gas Prices by Region and Over Time
- Grid Parity with Different Capital Cost, Carrying Charge Rates and Natural Gas Prices

*Key Topic: Overview of Project Finance, Cost of Capital, and Pricing Contracts for Renewable Energy*

*Economic and Financial Theory of Project Finance*

- General Discussion of Risks for Renewable Projects
- Capacity Factor Risk (Solar, On-Shore Wind, Off-Shore Wind, Hydro)
- Construction Risk (Hydro and Off-Shore Wind versus Solar)
- Operation and Maintenance Risk
- Contract Risk
- Measurement of Risk using Traditional Finance Theory and WACC
- Review of Solar Manufacturers
- Theory of Cost of Capital, Beta and Equity Risk Premium Applied to Renewable Energy
- Contrast of Solar and Off-shore Wind from Traditional Cost of Capital and Free Cash Flow Perspective
- Debt Capacity and Project Finance Terms
- Debt Service Coverage Ratio Definition and Targets
- Effects of Debt Service Coverage Constraint versus Debt to Capital Constraint
- Debt Tenor, Alternative Repayment Structure, Average Life
- Credit Spreads and Target Credit Ratings in Project Finance
- Debt Service Reserve and Maintenance Reserve
- Covenants, Cash Flow Sweeps and Subordinated Debt

*Financial Statement Analysis in Renewable Energy Project Finance *

- Risks and Stages of Project
- Source and Use of Funds Statement before Commercial Operation
- Focus on Cash Flow and EBITDA
- Interpretation of Cash Flow Statement
- Reserve Accounts for Debt Service and Other Factors
- Computation of Equity Cash Flow and Free Cash Flow and IRR versus Return on Investment

*Project Finance Model and Set-up for Valuation of Renewable Energy*

- Setting-up Project Finance Model for Valuation
- Flexible Dates and Modelling Project Phases
- Assuring the Model is Accurate
- Structuring the Model with Operation and Financing Items
- Transparency in Model
- Project IRR to Screen Projects
- Equity IRR to Structure Projects and Minimum Required Equity IRR for Different Renewable Projects
- Equity IRR Complexities from Re-Financing, Alternative Financing, Tax Structuring, IRR measurement and Development Fees
- Resolving Circular References without Copy and Paste Macros arising from Funding and Sculpting

*Mechanical Issues in Creating and Interpreting Project Finance Models *

- Phases in Project Financing for Renewable Projects
- Sources and Uses Analysis in Models
- Importance of Debt Sizing, Debt Funding and Debt Repayment
- Fixed Asset Analysis
- Profit and Loss Statement and Tax Analysis
- Cash Flow Waterfall & Partnership Flip Structures

*Model Complexities for Renewable Finance Projects – Valuation, Re-financing, Renewable Energy Pricing, Cash Flow Flips*

- Mechanics and Rational for Alternative Incentive Schemes
- Benefits of Investment Schemes Relative to Feed-In Tariffs
- Effects of Incentives on the Overall Cost and Require Feed-in Tariffs of Different Renewable Projects
- Flips and Allocations of Cash Flow to Different Equity Investors
- Interpretation of Risk and Return with Different Cash Flow Allocations

- Project Valuation Assuming Different Sale Dates and Risk Adjusted Discount Rates from Buyer Perspective as Risk of Project Changes from Signing Contracts, Working Through Mechanical Issues and Demonstrating Cash Flows from Historic Record.
- Incorporate Refinancing Assumptions in Financial Models through Adding Sources and Uses of Funds Analysis in Alternative Re-financing Periods and Evaluating Different Possible Features of Re-financing.

**DAY 2: Application**

*Review of Costs, Capacity Factors, and Pricing Structures for Alternative Renewable Technologies and Construction of the Project Finance Model*

- General Discussion of Solar PV and Solar Thermal
- General Discussion of Technology
- Demand and Supply and Changes in German Feed-in Tariffs
- Review of Solar Companies and Financial Issues
- Financial Performance of Manufacturers
- Balance of System Costs and Inverter Costs
- Performance Guarantees and Other Contract Terms
- Financial Analysis of Supplier: First Solar Case Study

*Overview of Resource Assessment in Renewable Projects *

- Resource Assessment of Wind – working with hourly wind speeds, Weibull Distributions and Statistical Analysis (P90, P50 etc.)
- Resource Assessment of Solar – Direct and Diffuse Radiation, Sunlight Angles and RetScreen.)
- Resource Assessment of Geothermal and Hydro
- Probability Distributions of Resources

*Modelling Resource Distributions of Solar Power *

- Data sources for Solar Irradiation by Hour over Multiple Years
- Computation of Production from Efficiency with Adjustments for Performance
- Statistical and Seasonal Distribution of Production Data in Different Locations
- Use of RetScreen for Simple Analysis
- Computation of P95, P90, P75 and P50 Statistics

*Interpretation of Resource Assessment for Risk Analysis *

- Mean Reversion of Resources
- Aspects of Probability Distribution other than Resources
- Use of Probabilities in Financial Analysis
- Contrast Among Different Risks

**Risk Analysis of Renewable Energy**

*General Discussion of Risk in Renewable Energy Projects *

- Discussion of Differences in the Nature of Risks for On-Shore Wind (Wind Resource), Off-Shore Wind (Maintenance and Life Expectation), Solar (Small Risks become Big with High Leverage), Hydro (Capacity Factor and Merchant Price Risk), Wave (Refurbishment Timing), Geothermal (Development Probability).
- Risk Matrix, Risk Classification and Risk Mitigation
- Risk Evaluation Using Break-Even and Sensitivity Analysis
- Risk Evaluation Using Scenario Analysis with Focus on the Manner in which Bankers Apply Downside Analysis
- Measurement of Risk Using Structured Master Scenario Page in Excel Model with Options for Adding Sensitivity Analysis to Defined Scenarios
- Risk Analysis Using Spider and Tornado Diagrams

*Credit Analysis in Renewable Energy Project Finance *

- Background on Probability of Default and Loss Given Default
- Definition and Calculation of DSCR
- Use of DSCR in Base (P50 Cases) and Downside (P90, P95 Cases) in Determining Debt Capacity
- Application of LLCR and PLCR

*Contract Structuring in Renewable Energy Project Finance *

- Importance of EPC Contract in Different Projects (Off-Shore Wind and Hydro)
- Importance of Performance Contracts in Solar Projects for Degradation
- O&M Contracts and Warranties
- Insurance
- Counter-party Risk in Different Projects

**Course Information**

**Course:** Wind Financial Analysis & Production Availability

**Course Length: **2 days

**Overview: **This course is all-encompassing for wind energy project. We’ll walk you through the financing, the risk analysis, the resource availability, and everything else you need to know to successfully finance a wind project in the most efficient manner.

*N.B. *This course is geared towards an international audience and does not include US tax equity financing concepts. If you’re looking for tax equity training, contact us.

**Agenda**

*Day 1: Structuring, Wind Project Finance and Simple Risk Analysis*

*Excel Background and Model Structure *

- Excel techniques, functions, short-cuts and tools in project finance modeling
- Alternative risk measurement and financial modeling
- Spreadsheet layout style and conventions

*Review of Structure of Actual Project Finance Models *

- Discussion of different actual models
- Working with real models to add sensitivity analysis
- Understanding the structure of actual models
- Running pre-built scenarios in actual models
- Interpretation of different ratios in models

*Structuring and Building a Project Finance Model *

- Develop a general model layout
- Construct transparent model titles
- Evaluate titles for model details such as amortization of debt fees, deferred taxes, and minority interest
- Build model equations in segments
- Compute key model outputs
- Computation and basis for LLCR, PLCR and average debt life
- Alternative specifications of the debt service coverage ratio

*Risk Analysis from Alternative Perspectives in Simple Models *

- Economic value drivers in projects
- Sensitivity analysis and flexible graphs
- Break-even analysis with data tables, match and index functions in basic project finance model
- Effective scenario analysis with index and data table
- Extending scenario analysis to compute spider diagrams
- Creating sensitivity analysis from scenario analysis
- Adding Monte Carlo to models

*Day 2: Advanced Risk Analysis, Debt Structuring and Cash Flow Waterfalls, Credit Enhancements*

*Risk Analysis with Existing Models*

- Using graphs to find variables that influence outcomes
- Finding problems in models with sensitivity analysis
- Adding scenario analysis to models without macros or circular reference problems
- Working with models that contain circular references
- Adding scenario analysis to models that include macros

*Effective Presentation of Risk Analysis *

- Use of Spinners, Drop Downs and Buttons without losing base case · Addition of custom case with flexible sensitivities from scenarios
- Creation of sensitivity cases derived from base case, downside case etc. · Presentation of sensitivity cases with graphs and charts

*Debt Structure and Cash Flow Waterfall Exercises*

- Debt sizing and capacity
- Debt structuring using alternative repayment techniques – level and amortizing
- Debt Sculpting using Solver and Macro
- Effects of debt tenor and debt structure on equity IRR and DSCR
- Cash flow sweeps and dividend lock-up
- Debt service reserves and re-financing
- Circularity macros

*Risk Assessment and Valuation of Credit Enhancements *

- Measurement of probability of default and loss given default from financial models
- Theory of risk benefits from sweeps, covenants and DSRA
- Measurement of benefits of covenants, cash flow sweeps and DSRA using break-even analysis
- Measurement of benefits of credit enhancements using scenario analysis
- Calculation of probability of default and loss given default with and without credit enhancements using Monte Carlo simulation
- Addition of Monte Carlo simulation in existing project finance models